This invention relates generally to insurance programs and, more particularly, to methods and systems for insuring exposure to liability created for an entity by the resignation of a member.
Many people desire to find a comfortable location to enjoy a relaxed lifestyle while having access to multiple amenities. In addition, many families enjoy spending time with people that have similar life styles, hobbies, and preferences. In addition, some people enjoy a certain activity so much, that they prefer to join a club to have access to such activities on a frequent basis.
Generally, in order to join such clubs, a person or family pays an initiation fee and annual or monthly dues. While the initiation fees are important to the club since they are used primarily for capital expenditure (golf course improvements, swimming pool, club house), the dues are used for operations such as salaries, restaurant and bar operations, daily maintenance and retail opportunities. Many clubs have one of two types of refundable initiation fee programs. The first type of program is for equity clubs where, once a requisite number of memberships to the club has been sold, a refund is paid to the resigned member, in the order of resignation, as each new membership is sold. Typically the amount paid is a percentage of the then current initiation fee. The resigning member is typically required to continue paying the monthly dues until the resigning member is replaced by a new member. The second type of program is for initiation deposit program clubs where the initiation fee is a deposit, i.e., a tax-free, no interest loan from the member. For a resigned member to recover the initiation deposit, the club membership must be full. The resigning member will then be repaid when a new member joins based on the resigning member's place on the resigned member list. Alternatively, if the club never achieves full membership, the resigning member is repaid no later than 30 years from the date the membership was first sold. Finally, there are many private clubs that offer no refundability of initiation fees at all.
Prospective club members are typically concerned that if they must leave a club for an unforeseen reason, they will not have the ability to retrieve all or a portion of the initiation fee. This potential lack of prompt payback of the initiation fee is a deterrent to new people joining clubs. It is therefore desirable to enable a club member to obtain at least a portion of their initiation fee upon resigning from the club in a reasonable amount of time.